Why The Government Needs To Play a Role In The Development Of Entrepreneurship?

Developing the right ecosystem for Entrepreneurship Development and one where start-ups can start smoothly and strive should be every government’s role. For an entrepreneurial environment to help companies start and grow, you need the government to provide a proper regulatory system that would not only provide the structure for companies to conduct business, but also give them the freedom to experiment and try new things. Many governments forget that rules and regulations should facilitate and not stifle company creation and growth.

With entrepreneurship and startups especially, the main need is for EXPERIMENTATION. Entrepreneurs have to be able to test out their hypothesis and to be able to try out their new ideas on the market. The government has to allow for entrepreneurs to be able to work freely and easily for this to happen.

Unfortunately many governments put in place regulations which support big companies while stifling smaller companies. Many a time governments assume that rules which suit big companies should also be easy for smaller companies and start-ups to adapt to. Well they are wrong. There must be some structure and there must be some rules but it is best to have minimal rules than to over prescribe.

The other issue is of the society’s mindset on how success is defined. For example, in Singapore, the definition of success in the past was so narrowly defined as one of having achieved academic excellence, obtaining a government scholarship, and landing a good administrative services job or a job in a very large multinational company or large government-linked company. This was the environment created by the government in the past. Since a whole generation has been ingrained with such beliefs right from their school days, it becomes difficult to change their thinking. So sometime in 1999, the Singaporean government started an entrepreneurship drive, which was a necessary thing, because the environment was one where the government had significant influence and control over how things were done in the economy.

In the longer term though, once the momentum gets going, the government must take a few steps back, slowly, one step at a time, until the whole entrepreneurship momentum can be sustained on its own as it is driven by the private sector. Once this has happened, the government can continue to play the role of the facilitator and creator of a much more conducive environment that can sustain the momentum. The government should not have the view that they will want to control everything forever because they will never fully understand what it takes to start and run companies and how the market fully works. In the longer term, the best role for the government is to be a facilitator and creator of a conducive environment, listening to the people who know best on what it takes to make entrepreneurship work.

This will of course work on the premise that the government believes it does not have to be directly involved in shaping the landscape and that the private sector can sustain the momentum by itself. If the government still feels it should be the biggest player, then we do not see any chance for an entrepreneurial economy to emerge. Such a plan will be doomed for failure if the same approach is adopted by the government – that is, to implement policies, rules, and regulations suited more for the bigger government-linked companies and multinational companies, and for the government to be directly involved in doing business.

Knowing When to Make an ExitSo how can the government be less involved? At the very least, the government getting less involved in business, less involved in picking winners, and less involved in influencing the outcome of companies is already a big step. What the government can do for a start is to not get involved in the things I just mentioned. These steps are definitely very proactive steps as opposed to the belief that the government should not and cannot be involved. And if the government is not engaged in planning these exits, there is little chance of the private sector doing very much more, which is what is really needed to make entrepreneurship thrive in Singapore.

In SINGAPORE, at least, the first step in the whole entrepreneurship journey has to therefore start with the government, but it does not and will not end with the government. So in the long-term, when we reach a steady state, we will not need to depend on the government. Neither will the government be able to do much once the momentum is in place. We are glad that in Singapore we have seen good momentum in recreating the entrepreneurial economy and the government has played a significant role in facilitating this.

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9 Comments

Much agreed. The government’s role should be to facilitate new businesses to grow and build strong guidelines for big businesses to follow. Their job is to make it easy for anyone to become an entrepreneur and they’re also responsible to let that be known the general public. I think Singapore will benefit greatly for the country’s progressive stance on business and other countries should follow suit if they don’t want to get left behind.

Every government of democratic nations struggle with the balancing act between being an enforcer and an enabler if you may. I think it’s fair to criticize many governments around the world for not doing enough to develop entrepreneurship, but at the same time we must understand how difficult it is to keep a fair balance. Governments around the world should do more encourage entrepreneurship and hopefully Singapore will lead the way.

Singapore is one of the largest hubs of commerce around the world, so I’m not surprised that the country is taking the leadership role in developing entrepreneurship. Governments around the world would achieve so much more if not for the lobbyist of business interests, but the sad reality is that we can’t rely on the government to get things done right either. People have to push their government to do things the right way and they have to monitor the government consistently to make sure they keep their word. If the people are vigilant I think the governments can and will play a major role in the development of entrepreneurship.

I believe many Asian countries define success with good college education and stable job. This of course has been changing a lot recently with the collapse the job market in many of these countries and now people are slowly seeing what happens when you depend on someone else to put food on your table. I’m an American and I gotta say entrepreneurship in my country has been dying slowly over the past half century and now we’re at a point where small businesses are being completely phased out. Singapore is taking a step forward while we’re taking multiple steps backward. What a shame…

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I do agree that in the longer term the government should take a few steps back as the business matures, but I also wonder by how much. Most businesses will stay small or at best develop into medium sized businesses, but on rare occasions some will develop into large corporations. So there has to be government intervention at all times. I know my opinion is not a popular one, but I do think it’s important that the government continues to keep a close eye on all businesses and thereby entrepreneurs.

Developed nations around the world have long had the stance that entrepreneurship isn’t best way to success. For example US, UK, and Japan make it very difficult for people to start new business and so they discourage entrepreneurship. Even now as unemployment is still sky high, regulation on small businesses haven’t eased up at all. I applaud Singaporean government for doing the right thing, but I don’t think it’s something that can be expected of other developed nations.

If the government can’t find the right balance between regulation and deregulation, then I say it’s better that they stay out of it completely. Not that anything remotely like that will ever happen, but I’m just giving a drastic example. I say the government should make very basic laws that will keep the competitive balance and the rest they should let the free market decide.

The average person, the little guys used to own many types of businesses in the past. Nowadays the small stores that used to dominate the neighborhood is replaced by a single mega store and we shop for everything in one place. There’s less retail jobs because everything’s centralized now and every facet of our lives depends on big businesses to provide for us. This has direct correlation with the government making it harder and harder for us to become entrepreneurs. We’re brainwashed from early on that we must go to good school and get a good job. I don’t know that we’ll ever be able to go back the way things were.

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The idea behind EntreCity is to help entrepreneurs build successful businesses. We want to achieve this by helping people build an entrepreneurial mindset and to arm them with the technical tools to start and grow businesses. Whether or not you are ready to start a business, EntreCity aims to help everyone to think with an entrepreneurial mindset.